Bill Introduced to Include MCO/DMOs in Medicaid Fraud Investigations by HHSC-OIG

Bill filing has started for the upcoming legislative session at the Texas Capitol.

One of the early filings is HB 648, a bill introduced by House Rep. Richard Peña Raymond of Laredo to modify the mandate of the HHSC Office of Inspector General to include MCO/DMOs as targets for Medicaid fraud investigations.  Currently, Section 531.102 of the Government Code only mandates that the agency investigate allegations of Medicaid fraud by providers and recipients.

Cases of suspected MCO/DMO fraud

For example, section (f) (2) (A) would be updated to read “if a provider or Medicaid managed care organization is suspected of fraud or abuse involving criminal conduct, the office must refer the case to the state’s Medicaid fraud control unit, provided that the criminal referral does not preclude the office from continuing its investigation of the provider or Medicaid managed care organization, which investigation may lead to the imposition of appropriate administrative or civil sanctions; or…”

It also adds a clause that allows the agency to recommend enforcement actions against an MCO/DMO:

“(z) Based on the results of an audit, inspection, or investigation of a managed care organization conducted by the office under this section, the office may recommend to the commission that enforcement actions, including the payment of liquidated damages, be taken against the managed care organization and suggest the amount of a penalty to be assessed.”

Remove monetary recovery as criteria

Another change to the current legislation governing the duties of HHSC-OIG is to remove a clause that instructs the agency to only pursue cases that have “the greatest potential for recovery of money.”  The overriding criteria would become only “cases that have the strongest supportive evidence.”

A copy of the bill is provided.

HB00648I

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